Defence Secretary Sir Michael Fallon has refused to rule out plans to reduce the size of the Royal Marines as claims arise that the British Military is facing a financial 'crisis'.

The Times newspaper has suggested that the Ministry of Defence are facing a £10 billion funding shortfall and this is partly down to the rising cost of new ships, jets and the escalating cost of replacement Trident submarines.

The MoD released a statement in response to The Times article saying:

"It is unclear how the figures presented by The Times have been calculated and therefore we cannot verify their accuracy".

They also stated that “spending is monitored continually to ensure the £35 billion Defence budget focuses on front line priorities and delivers value for money by maximising efficiencies.”

In an interview this morning Fallon said there was "not a lot" he recognised in the report. He did, however, say:

"We have got 7,000 Royal Marines. The actual balance, the number of sailors and the number of marines, that's a matter for the First Sea Lord to keep under review.”

Told it was noticeable that he was failing to deny there would be cuts to numbers, he replied: "What I am saying to you is we have 7,000 Royal Marines and it is for the First Sea Lord, who runs the Royal Navy, to look all the time at the balance between marines and sailors, and I have not agreed any cut in the size of the Royal Marines.

"What we are looking at is the way in which our armed forces work, the different tasks that they have and we are constantly looking to see that they are fit for purpose in what we do".

"So, if something is no longer needed, if it's redundant, we need to make sure that we can put the savings back into new equipment."

Parry described the armed forces as being paid for by "Post-dated cheques."

The report comes as Sir Michael is to join US counterpart Jim Mattis in stepping up calls for more allies must move towards the target of spending 2% of GDP on defence, when they meet for talks in London later today.

Questions surrounding this report are bound to come up when Sir Michael Fallon and James Mattis face questions from reporters.